Energy Musings - June 9, 2025

A new lawsuit over the reversal of the Empire Wind stop-work order may create problems for the government and Equinor. It questions whether the lease is valid along with issues about APA compliance.

Empire Wind Sued Over Lease And Permit Approval

On June 3, non-governmental environmental organizations, trade groups, and fishing industry companies filed suit to stop the Empire Wind project from progressing with construction. The suit was filed in reaction to the sudden reversal on May 19 of the April 16 stop work order by Doug Burgum, Secretary of the Interior. That one-month whiplash had proponents and opponents of offshore wind in shock. The plaintiffs note that nothing related to the investigation of the approval process was reported as required when the stop work order was issued. Therefore, the plaintiffs charge that the government violated the Administrative Procedures Act (APA) and filed their lawsuit in the U.S. District Court for New Jersey, where the plaintiffs are based and where their injuries will be felt.

Reports are that the government’s reversal came after a tacit agreement between President Donald Trump, who had paused all wind leasing and permitting activity with an executive order on January 20, 2025, and New York Governor Kathy Hochul to secure permits for new natural gas pipelines in return for restarting Empire Wind and saving the jobs at its Brooklyn Navy Yard construction site. The governor’s staff said no agreement was reached, but the media reported the agreement as fact.

Williams Company, the sponsor of two prior pipeline projects in New York that were sabotaged earlier by New York’s refusal to grant water quality permits, suddenly announced it was restarting the permitting approval process. Alan Armstrong, CEO of Williams, had been quoted by Barron’s in an interview at the CERAWeek conference in March discussing prospects for these pipelines, said, "We're not gonna go putting our neck out until they invite us with the red carpet rolled out."

He has now said the company was moving forward in the permitting process, which could put these pipelines in operation by the third quarter of 2027. Armstrong said gas pipelines were now more acceptable in New York because they offer a vehicle for reducing high energy bills and emissions, both have been rising due to the push for renewable energy and the dependence on fuel oil for winter heating. In a recent CNBC interview, Armstrong noted that Williams had already applied for permits from the Federal Energy Regulatory Commission, the U.S. Army Corps of Engineers, and New York State.

The lawsuit may trip up Equinor, Empire Wind’s developer, and the State of New York, let alone Secretary Burgum. It opens up with a novel argument against the project. Still, it slams the defendants for failing to follow the proper legal steps mandated by the President’s executive order, which was invoked in the stop-work order, thereby violating the APA. This law governs how federal administrative agencies may propose and establish regulations.

Empire Wind sits amid key shipping lanes into New York Harbor.

Equinor, previously Statoil, is developing Empire Wind. The project was originally a joint venture between Statoil and BP plc. Together, they owned four leases – Empire Wind 1, Empire Wind 2, both off New York and New Jersey, and Beacon Wind 1 and Beacon Wind 2, off Massachusetts. At the beginning of 2024, the joint venture was restructured with non-cash swaps, leaving Equinor with 100% ownership of Empire Wind I and 2 and BP owning both Beacon Wind projects.

The Empire Wind 1 lease, OCS-A-0512, was acquired in a Bureau of Ocean Energy Management (BOEM) lease sale on December 15-16, 2016. The online sale involved five industry developers and the State of New York and lasted for 33 rounds. The industry bidders included Avangrid Renewables (a subsidiary of Spanish utility Iberdrola), Denmark’s DONG Energy (now Ørsted), Germany’s Wpd Offshore Solutions, Innogy, a German utility, and Statoil (now Equinor). The New York State Energy Research and Development Agency (NYSERDA) was also a bidder.

DONG and Innogy dropped out in round 22, Wpd in round 24, and Avangrid in round 30. Equinor won the bidding in round 33 with an offer of $42.5 million, about $2 million more than NYSERDA offered. The commercial lease was signed in March 2017.

The fact that all the bidders, other than NYSERDA, were foreign companies was never raised as an issue until this lawsuit. The lawsuit’s first count is that Equinor’s lease is invalid under the terms of the Outer Continental Shelf Lands Act (OCSLA). The suit points to the following information:

“42. Under OCSLA, a ‘commercial lease’ is the instrument that defines ‘the terms and conditions under which a person can conduct commercial activities’ on the outer continental shelf. 30 C.F.R. 285.112 [emphasis added].”

The claim goes on to note that under OCSLA regulations:

“Person means, in addition to a natural person, an association (including partnerships and joint ventures); a federal agency; a State; a political subdivision of a State; a Native American Tribal government; or a public, private, or municipal corporation.”

“45. As the statutory and regulatory definition shows, a foreign government or its instrumentality is not among the persons who may receive a lease from BOEM for generation of electricity on submerged lands on the Outer Continental Shelf.”

The suit notes in a footnote that under OCSLA, a state is defined as:

“(1) each of the several States;

(2) the Commonwealth of Puerto Rico;

(3) Guam;

(4) American Samoa;

(5) the United States Virgin Islands; and

(6) the Commonwealth of the Northern Mariana Islands.”

While a novel claim, the law seems clear that foreign entities, especially foreign-controlled entities such as Equinor, are ineligible to own offshore leases. Equinor is 67% owned by the Norwegian government, as the lawsuit demonstrated with information from public documents.

How the court will deal with this question is interesting. Can foreign companies establish limited liability companies in the U.S. as a way around the OCSLA regulations? Virtually every offshore wind development is conducted by LLC entities, which is a way around having to disclose their financial details in public financial filings. The ownership, however, continues to go directly to a foreign entity.

Further complicating this issue is that in the 1970s, Statoil was a buyer and holder of oil and gas leases in the Gulf of Mexico. They were never developed and were later relinquished during the 1980s industry downturn. Does that history legitimize Equinor’s continued participation in the U.S. offshore industry, albeit in a different region and energy sector?

The decision on this question impacts other recently completed offshore wind projects, and all but one currently being constructed. A complicating issue is Ørsted’s ownership of Block Island Wind off the Rhode Island coast. The wind farm was developed by a U.S. entity but sold, along with undeveloped leases, to Ørsted, the Danish developer. Maybe the court will grandfather existing permitted projects and their ownership, but then mandate that BOEM adhere to OCSLA’s restriction on foreign ownership for future offshore leases. Given the absence of American companies developing projects, this alone might crimp the offshore wind industry. Besides Dominion Energy in Virginia, only one American company is holding a lease for a new project off New Jersey (Invenergy’s Leading Light Wind).

The heart of the lawsuit over Empire Wind rests on the process under which Secretary Burgum issued the stop-work order and reversed it a month later. The plaintiffs note that such action violates the APA when the steps required to follow from the original stop-work order were ignored in the reversal.

This foundational claim in the suit sets the stage for the plaintiffs to detail all the shortcomings of BOEM’s permit approval process. Their argument begins by outlining President Trump’s actions in January and Secretary Burgum’s rationale for his stop-work order.

Secretary Burgum’s stop-work order was based on President Trump’s January 20, 2025, Presidential Memorandum. That memorandum directed the Secretary to investigate all offshore wind programs that have issued permits to see if environmental concerns had been adequately addressed.

The plaintiffs quoted Secretary Burgum’s stop-work order.

“The Bureau of Ocean Energy Management (BOEM) is issuing this Director’s Order to Empire Offshore Wind LLC to halt all ongoing activities related to the Empire Wind Project on the outer continental shelf to allow time for it to address feedback it has received, including from the National Oceanic and Atmospheric Administration (NOAA), about the environmental analyses for that project. BOEM received this and other feedback regarding Empire Wind as an outgrowth of the review that the Department is engaged in related to offshore wind projects.”

The stop work order prevented further activity at Empire Wind “until … BOEM has completed its necessary review.” This review was to address specific deficiencies identified in the Presidential Memorandum.

“…legal deficiencies underlying the Federal Government’s leasing and permitting of onshore and offshore wind projects, the consequences of which may lead to grave harm — including negative impacts on navigational safety interests, transportation interests, national security interests, commercial interests, and marine mammals — and in light of potential inadequacies in various environmental reviews required by the National Environmental Policy Act to lease or permit wind projects,…”

A month later, when the Secretary amended the stop work order, he stated:

“On April 16, 2025, the Bureau of Ocean Energy Management issued a Director’s Order to Empire Offshore Wind LLC to halt all ongoing activities related to the Empire Wind Project on the outer continental shelf. That Order is hereby amended to lift the halt on activities during the ongoing review.”

On April 16, when the stop work order was issued, the permitting review needed to be reviewed to see if BOEM complied with all the rules and addressed the concerns of other government agencies impacted by the offshore wind project, who suggested remediation steps to address them. However, when the stop work order was lifted, the language noted that the investigation was “ongoing.” If the conditions in April have not changed, i.e., the investigation remains ongoing, how can Secretary Burgum allow Empire Wind’s construction to continue?

As the suit lays out, “The record of the Empire Wind approval, including the United States Coast Guard analysis, the National Marine Fisheries Assessment, the NOAA assessment and the Final Environmental Impact State (EIS), among others, reflect extensive environmental, ecological, visual and economic harm that is not remediated, is left for future determination, is unresolved and undetermined or is deemed not capable of scientific resolution due to the absence of adequate scientific knowledge, all of which supports the Presidential Memorandum’s concern that the prior permits were the product of inadequate investigation and review.”

The balance of the lawsuit filing details the problems with the deficiencies in the review acknowledged by the Coast Guard, the National Marine Fisheries, NOAA, and BOEM’s Final Environmental Impact Statement for Empire Wind. For those readers who wish to learn more about these deficiencies, we suggest reading the guest op-ed by our friend Meghan Lapp, which we published in our June 3, 2025, Energy Musings issue. https://energymusings.substack.com/p/energy-musings-june-3-2025.

Securing an agreement from the New York governor to issue state water quality permits to allow the two Williams pipelines to move forward may have led to Trump and Burgum overlooking the legalities of adequately addressing the Empire Wind stop work order. Although enabling New York and New England to access increased, cheap natural gas volumes is critical for preventing future power blackouts and slowing electricity price increases, it does not exonerate the failure to lift the stop-work order for Empire Wind properly. The President’s January wind industry pause was instituted with a directive to conduct a complete investigation of the permitting process and whether important government agencies’ objections were appropriately addressed. Therefore, the investigation must be completed and its findings publicized.

It will be interesting to see the responses from the defendants – Secretary Burgum, BOEM, and Equinor.

Another interesting twist in the Empire Wind approval process was an article from Linda Bonvie on her Badditives Substack. She discovered no reference in BOEM’s environmental impact statements to an active geological fault in the New York Bight area that underlies a portion of the Empire Wind lease. This fault was discovered in 1982. This chart shows the location of the fault and the lease.

The chart has five dots, with numbers ranging from 3 to 5.2 in New York and New Jersey. Those dots and numbers reflect the epicenters and magnitudes of earthquakes in the area related to the fault. Bonvie’s analysis showed that any potential mentions of the fault’s geology were blocked from public view, as well as other material about offshore geologic conditions. We verified that pages and text were blacked out.

A geologic fault in the Empire Wind lease could trigger earthquakes.

Seeing the data sources utilized by Tetra Tech in its geological analysis of the lease area conducted for Equinor and submitted to BOEM, blacked out, was strange. It appears this has become a popular way to obscure from the public information they need to know about risks and costs associated with offshore wind projects. We hope the information is available and read closely by the regulators, who provide the only protection the public can rely upon. We do not know whether this information was available to the other federal agencies whose review is required.

Is it possible that the pile-driving of Empire Wind turbine foundations creates an earthquake? While only one 5+ magnitude earthquake in the New York City area has been reported, one wonders whether more frequent or larger quakes could be triggered. How many homes, buildings, and infrastructure, such as roads, bridges, water, fuel, and power lines in New York and New Jersey can withstand a severe earthquake?

San Francisco’s elevated highway was destroyed in the 1989 earthquake.

Could the East Coast resemble San Francisco after the 1989 Loma Prieta earthquake or the San Fernando Valley after the 1994 Northridge earthquake? The picture above shows the elevated highway system that ran through the San Francisco waterfront, which the Loma Prieta earthquake destroyed. The highway was rebuilt at ground level.

Bonvie received the typical run-around from BOEM officials when she questioned them about the information being redacted. She was told that BOEM’s regulations require that a developer’s Construction and Operations Plan (COP) must “identify and asses geologic hazards in the project area.” However, that information is contained in Appendix H, which is unavailable to the public.

When Bonvie asked if she could obtain a copy of that appendix, the BOEM press officer wrote in an email, “The marine site investigation report (MSIR) contains confidential information and therefore, is not publicly available. We refer you to Empire Wind for specific questions on the MSIR.” Her efforts to get a response from Equinor and its vendor Tetra Tech were unsuccessful.

The lawsuit over Empire Wind opens the next chapter in the offshore wind saga. The revelation that information about a potential earthquake risk associated with the Empire Wind project was absent from the public record adds another dimension to the questionable approval process BOEM conducted. How many shortcuts were taken to rush the Empire Wind approval to support the Biden administration’s target of building 30 gigawatts of offshore wind by 2030? The public deserves this information, especially if the federal government puts them at risk without their knowledge or consent.